Massachusetts LLC: How to Form an LLC in Massachusetts

Massachusetts LLC

Going to start your new business in Massachusetts? You must be pretty excited and nervous about all the new possibilities. Want to get rid of some of that worry so that you’d focus on running your venture? Form an LLC in Massachusetts. 

Don’t know where to start? From which documents need to be filed to how to handle the business taxes, we are here for you. In this comprehensive guide, we will tell you all you need to know about starting a Massachusetts LLC.

Without further ado, let’s get started!

Quick Summary

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Are you in a hurry and don’t have the time to go through the complete article? Don’t worry – here are the quick highlights of what you need to do to form your LLC in Massachusetts!

  1. Name Your LLC
  2. Choose a Registered Agent
  3. File the Articles of Organization
  4. Create a Business Operating Agreement
  5. Get an EIN
  6. Submit the Annual Report

When you are thinking of forming an LLC in Massachusetts, you have two options – form the LLC yourself or take the help of professional LLC incorporation services. Forming the LLC on your own will definitely help you save money and cut down on the expenses.

However, you will have to spend a lot of time navigating through the legal paperwork, sending the documents to the respective documents, and waiting to see if you made an error or not. As a new business owner, your sole focus should be on how to make your business thrive. 

Therefore, we recommend that you leave the legal documentation in the hands of experts and give your attention whole-heartedly to your new business venture. There are various LLC formation services with different features and packages. You can go through the detailed reviews on our website to know more about all of them. 

Our top choices are ZenBusiness and IncFile.

  • ZenBusiness is our top recommendation since it has affordable prices and well-rounded, feature-full packages. The stellar reviews from their customers are proof that they put your needs first and take care of all your requirements.
  • IncFile is the perfect choice for those individuals who want professionals to form their LLC but don’t have the budget to spare. IncFile offers a free starter formation package that will get your LLC in Massachusetts formed quickly and efficiently!

What is an LLC

Before we go on and tell you how to form your LLC in Massachusetts let’s briefly discuss what an LLC is and what are the benefits an LLC offers. An LLC is a type of business structure that combines the best features of a sole proprietorship and corporation to give you a perfect solution for your business needs.

With the flexibility of a sole proprietorship and limited liability protection of a corporation, your business can grow without any fear or hindrances due to legal disputes. No matter what happens, be it a lawsuit or even bankruptcy, your personal assets such as your home, your car, etc. will be out of harm’s way.

Form an LLC in Massachusetts

To create your LLC in Massachusetts, you need to do three major things – select a name for the LLC, designate a registered agent, and file the paperwork. You can send in the paperwork via traditional mail or you can file your paperwork online.

The filing fee is $500 and once you file documents, your Massachusetts LLC will be up and running in no time. The process of forming an LLC is simple and to make it even easier for you, we have put forth this step-by-step guide so that you know everything there is to know!

Selecting the Name of Your LLC

Before you can file your paperwork, you need to come up with a name for your company. Your name is the face of your business – it not only tells the people who you are but also what your company stands for.

  • Rules and Regulations. You need to ensure that the name you select is unique and is not taken up by another company in Massachusetts. A few changes in the spelling, punctuation, etc. will not do. 

Make a list of the names you think are perfect for your LLC and then check the Massachusetts business database to ensure that the names are up for grabs. Moreover, there are a few rules and regulations that you have to adhere to while naming your company. 

For instance, you have to add the word LLC or some other legal variant to the end of the name. Check which designators are approved by the state beforehand. Words that are derogatory in nature, as well as words that might confuse your LLC with a government agency, are not allowed.

  • Name Reservation. Found the perfect name and it is available as well? Well, you should lock it down before someone else does. However, what if your paperwork is not ready and you have some details to take care of?

Will you risk someone else taking the name you so passionately chose? Well, to avoid this situation, you can reserve the name of your future LLC. File an application for reservation of name with the Secretary of State and pay a reservation fee of $30. 

The name will be yours for the next 60 days! If you want to reserve it further after that, you can do so as well by paying the fees once more. You can either mail the application or turn in the document in-person. 

However, make sure to call the office before you go since the protocols have changed due to the COVID-19 global pandemic.

  • Getting a Web Domain. We live in a world surrounded by technology and it is a given that you will create a website for your business. Therefore, we suggest that before you choose a name, you should look at whether a web domain in that name is available or not.
  • Using a DBA. If you want to do business under a name that is different from your LLC’s registered name, you can do so by filing an application for a DBA – doing business as. Your DBA name needs to register with the county or city where your business is present.

Appointing a Registered Agent

Once you have selected a name for your LLC, you need to select a registered agent. A registered agent is a person or entity that will act as the point of contact for your LLC for any legal documents and service of process documentation.

In case your LLC is sued or subpoenaed, all the necessary documents will be sent over to your resident agent. When you are choosing a resident agent, you generally have three choices – become your own registered agent, choose a person you know to act as your resident agent, or hire a professional LLC incorporation service.

Acting as your own registered agent seems like the most logical, easiest, and affordable option. However, it is not in your best interest due to a couple of reasons. The address of the resident agent becomes part of the public records which means that you will have no privacy. 

Moreover, if you get served in front of your clients, it will definitely tank your organization’s reputation. Furthermore, it is highly likely that you will forget to check your mail and miss important deadlines which will have negative consequences for your LLC.

The same issues apply to hiring your family members, friends, or colleagues as your resident agent. Therefore, the best option is to hire a professional registered agent such as Northwest Registered Agent that will make sure all your legal needs are fulfilled.

Your privacy will be ensured and you will have complete control over the business hours you keep. If you become your own registered agent, you are legally required to be available during regular business hours in case the State of Massachusetts needs to contact you which is not feasible.

Filing Articles of Organization

Now comes the most important step in forming your LLC in Massachusetts. This is the step that makes your LLC official. You have to complete the Certificate of Formation and then file it with the Secretary of the State.

You will need the following information for creating the articles of the organization.

  • LLC Name and Details. You will need to provide the name of your LLC as well as the street address of the office space. If you want to keep this off the records, you can use the address of the professional registered agent you hired.

A brief explanation regarding the general character and nature of your business also goes on the paperwork.

  • Registered Agent Name and Address. You will have to give the name & address of your LLC’s registered agent. The resident agent will be the point of contact between the government and your LLC. 

Remember that all the information you provide will become public. The resident agent will have to give their consent indicating that they accept being your resident agent.

  • Duration of LLC. If you want your LLC to stop existing after a certain period of time, you can do that as well. If you don’t put anything down, this will mean that you want your LLC to exist indefinitely. 
  • Details of members/managers. If your LLC is manager-managed, you need to list the names and addresses of every manager. If your LLC is member-managed, you are supposed to provide their details as well.

Moreover, you have to give the details of all the people who are authorized to execute the documents that you will file.

You can submit paperwork online or fill out forms and send them to the Secretary of State via traditional mail. If you file online, you will have to pay a $520 filing fee and if you choose to file the paperwork through the mail, it will cost you $500.

You can see that this part of forming an LLC is slightly technical and you are bound to make errors the first time around. Moreover, the filing fee is non-refundable which means that if your filing is rejected due to some reason, your money will go to waste. 

Therefore, hiring a professional LLC incorporation service such as ZenBusiness or IncFile is the best option.

Preparing the Business Operating Agreement

Every business has some rules and regulations in place that dictate its day-to-day working. LLC operating agreement is the legal document that details all this and a lot more. In Massachusetts, you are not legally obligated to submit a business operating agreement.

The document outlines the daily running of the LLC, how the finances such as profits/losses will be distributed, and how various decisions will be made. An LLC ensures that all the partners and business owners are on the same page so that any potential conflict can be avoided.

However, whether you are a single-member LLC or a multi-member LLC, you need to create a legal business operating agreement. In the absence of a business operating agreement, the State law will determine how your LLC functions.

A good operating agreement should contain the following details at least:

  • Percentage interests of the members in the LLC
  • The rights & responsibilities of the members
  • The voting powers of the members
  • Allocation of profits and losses
  • Rules for buying or selling assets

Acquiring an EIN

Do you have a social security number for paying your taxes? Similar to SSN, EIN is the nine-digit number assigned by the IRS to LLCs to help in filing the tax returns. You can apply for an EIN online on the website of the IRS.

With the help of an EIN, you can open financial business accounts, hire employees, pay for business expenses, etc. Whether you have a single-member LLC, or a multi-member LLC, an EIN is essential for both of them.

The application for an EIN takes only a couple of minutes and you will get your EIN. However, since getting an EIN is a technical task as well as one of huge importance, we suggest that you take the help of professionals with this one as well.

Even if you have an EIN for your sole proprietorship, you will need to get a new one when you form an LLC.

Filing Annual Reports

This is essentially the last step of making sure your LLC keeps running efficiently in the future as well. All the Massachusetts LLCs need to file an annual report with the Secretary of State. The domestic LLCs file a Limited Liability Annual Report while the foreign LLCs file a Foreign Limited Liability Report.

The filing fee for the annual report is $500 and you have to file the report every year before your LLC’s yearly anniversary. 

LLC in Massachusetts – Final Word

To run a successful business, you have to do a lot of hard work and put in plenty of effort. However, no matter how vigilant you are, there are times when you can’t prevent accidents and legal incidents.

For instance, if you run a delivery service, there is a likelihood that your delivery may run late at times. In case a customer decides to sue you, you will find yourself caught up in a legal predicament.

Will you lose everything that you earned? If you don’t create an LLC, the answer to this is probably yes. However, if you have formed an LLC in Massachusetts, the risk will be limited only to your business assets.

Your personal possessions such as house, car, and other personal belongings, etc. will not be at risk. Therefore, you should form an LLC in Massachusetts as quickly as possible. However, we know that as a new business owner you are going to have loads on your shoulders.

Instead of forming your LLC yourself and getting lost in the world of technical legal jargon, you should take the help of a professional LLC incorporation company. We recommend ZenBusiness and IncFile has the best LLC formation services out there.

  • ZenBusiness is the perfect choice for new business owners who want high-quality services at affordable rates. With glowing customer reviews and a courteous customer representative service system, you will be happy with the service you get.
  • IncFile is unbeatable when it comes to prices and affordability as they offer a free LLC formation starter package. All you have to do is pay the state filing fee and they will not charge you anything for their expert and professional services!

Here’s to you having a successful LLC in Massachusetts!

LLC in Massachusetts – Frequently Asked Questions

The LLC annual report fee in Massachusetts is pretty high. You will have to pay $500 every year. The report is not complicated and you simply have to update the government about any changes in your LLC’s structure, management, address, etc.

If you don’t file the report for two consecutive years, your LLC will be automatically dissolved by the state. The annual report is due before the anniversary of the LLC formation. To ensure that you don’t miss the deadline, you should hire an LLC formation service that will send you reminders before the deadline! 

The personal income tax in Massachusetts is 5% flat. The sales tax is also 6.25% flat. Usually, the cities and the counties don’t add any additional local sales taxes, so this rate is the same all over the state.

If you choose to have your LLC taxed as a C-corp you will have to pay the corporate excise tax determined by the taxable net income as well as the taxable tangible property. It is better to get expert help with your taxes.

The filing fee for Massachusetts LLC is $500. If you file the documentation online, you will have to pay $20 extra. Moreover, you can reserve your LLC name by paying a $30 fee.

If you file online, your LLC will be formed in a day or two. If you file documents through mail, you will have to wait a couple of days before your paperwork will be processed. We suggest that you file online since it saves time and only costs an additional $20.

Yes, a foreign LLC can operate in Massachusetts. If you own an LLC outside of Massachusetts, you will have to register as a foreign LLC by filing an application with the Secretary of the State. Similar to domestic LLCs, foreign LLCs also have to submit annual reports.

Yes, you can make changes in the details that you have provided for your LLC such as the name of your LLC, your registered agent, etc. For every change, you will have to submit an individual application and pay a filing fee for it as well.

If you are working as a sole proprietor or are going to establish a new business, it is better if you form an LLC. An LLC will limit your personal liability when it comes to lawsuits, debts, etc., and offers a flexible ownership and management structure as well as various tax options.

It is very important to ensure that your LLC name is unique and follows all the state regulations because the filing fee is non-refundable. This means if there is an error on your part and the filing is rejected, you will not get your money back.

So thoroughly search the state LLC database and check the guidelines and rules set down by the law before naming your LLC to avoid any errors.

Cite/Link to This Article

  • Stewart, Suzy. "Massachusetts LLC: How to Form an LLC in Massachusetts". One Brick Court. Accessed on April 10, 2021. https://onebrickcourt.com/massachusetts-llc/.

  • Stewart, Suzy. "Massachusetts LLC: How to Form an LLC in Massachusetts". One Brick Court, https://onebrickcourt.com/massachusetts-llc/. Accessed 10 April, 2021.

  • Stewart, Suzy. Massachusetts LLC: How to Form an LLC in Massachusetts. One Brick Court. Retrieved from https://onebrickcourt.com/massachusetts-llc/.